**Outdoor Luggage, Incorporated** manufactures high-end hard-sided luggage for sports equipment. Below is the data concerning three of the company’s most popular models:| | Ski Guard | Golf Guard | Fishing Guard ||-------------------|-----------|------------|---------------|| Selling price per unit | $250 | $370 | $235 || Variable cost per unit | $170 | $285 | $145 || Plastic injection molding machine processing time required to produce one unit | 10 minutes | 11 minutes | 15 minutes || Pounds of plastic pellets per unit | 11 pounds | 6 pounds | 13 pounds |**Required:**1. Assuming the total time available on the plastic injection molding machine is the constraint in the production process, calculate how much contribution margin per minute of the constrained resource is earned by each product. 2. Identify which product offers the most profitable use of the plastic injection molding machine. 3. If there is a severe shortage of plastic pellets requiring a cutback in production, and the new constraint becomes the total available pounds of plastic pellets, determine how much contribution margin per pound of the constrained resource is earned by each product. 4. Identify which product offers the most profitable use of the plastic pellets. 5. Determine which product has the largest contribution margin per unit.

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Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit Ski Guard $ 250 $ 170 10 minutes 11 pounds Golf Guard $ 370 $ 285 11 minutes 6 pounds Fishing Guard $ 235 $ 145 15 minutes 13 pounds Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product?

Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit Ski Guard $ 250 $ 170 10 minutes 11 pounds Golf Guard $ 370 $ 285 11 minutes 6 pounds Fishing Guard $ 235 $ 145 15 minutes 13 pounds Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Selling price per unit Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit Ski Guard $ 260 $ 100 Required 1 Required 2 6 minutes 15 pounds Required 3 Required 4 Required 5 Complete this question by entering your answers in the tabs below. Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? Contribution margin per minute of the constrained resource 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new…
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